Axel Springer Buys Stake In Thrillest, Adding to US Stable

1 Oct 2015 | Author: | No comments yet »

Axel Springer Buys Stake In Thrillest, Adding to U.S. Stable.

A day after announcing a deal to pay $343 million for control of Business Insider, the German publisher on Wednesday took a minority stake in Thrillist, a men’s lifestyle digital-media company. Thrillist Media Group, a digital media and e-commerce company targeting men, has raised $54 million in funding and will split apart its content and commerce divisions.The German media giant on Tuesday joined investors betting $54 million on Thrillist Media Group’s vision of the future for men’s lifestyle-content-meets-e-commerce destinations. That investment was part of a broader $54 million funding round with other investors that coincided with Thrillist spinning off its fashion e-commerce brand, Jack Threads, into a separate company. Under the deal, New-York based Thrillist also said that it is splitting its corporate structure, allowing men’s clothing shopping site JackThreads to operate as a separately owned and independent company.

Separately, Oak Investment Partners and SBNY (formerly known as Softbank Capital NY) are leading the investment into JackThreads, the men’s fashion e-commerce site TMG acquired in 2010. Dopfner’s tenure in 2002 it has aggressively moved to shed legacy print assets and today the bulk of its revenue and profits comes from digital media. The deal continues the trend of big media companies seeking growth — and hard-to-reach younger auds — through acquisitions or investments in digital players. Mathias Dopfner, CEO of Axel Springer, said: “The investment in Thrillist is a further step we are taking to expand our global footprint as a digital publisher, especially in English-language markets.

Hearst invested $21 million in Complex, another New York digital-media company targeting millennial males with pop-culture content, while NBCUniversal recently pumped $200 million apiece into BuzzFeed and Vox Media. Dopfner calls “foot-in-the-door” investments with American digital media companies, like the digital magazine Ozy and the short-form video purveyor Now This. We see strong further potential and are looking forward to close cooperation with Ben, Adam and the whole Thrillist team.” The Springer investment will help Thrillist expand into “new, targeted content verticals, broaden its video and social resources, aide in the expansion of its experiential events team, continue the development of its proprietary data and technology platform, Pinnacle, and further its newly formed branded content creation division, The CoLab,” the companies said.

The deal values the fast-growing but unprofitable seven-year-old company at roughly eight times this year’s revenue, according to people familiar with the situation. Founded in 2005 by Lerer and Adam Rich, Thrillist’s editor-in-chief, Thrillist says it reaches 15 million monthly unique visitors and over 80 million a month across its digital, social and mobile platforms. Dopfner argues that the Business Insider deal can’t be measured by the same valuation metrics of a traditional media deal. “It’s a Silicon Valley deal,” he said. “You may say that you don’t like that on the East Coast, but if you look at some of the Silicon Valley deals, they work out very well. It’s a growth asset.” He plans to continue to expand Business Insider’s audience beyond its current 76 million unique visitors for the next several years, and then look for monetization and profits down the road. That monetization is likely to involve some kind of a subscription model, which would be a departure for the largely advertising-supported Business Insider.

But he wasn’t a fan of melding digital media with e-commerce. “I just don’t think it’s a good model that e-commerce is subsidizing journalism,” he said. Ben Lerer, the CEO of Thrillist, said Axel Springer was one of several investors that liked one side of the business better than the other and contributed to a decision to split the company.

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